HCMCV Hanoi Regional Consumer Differences

Confidential & Proprietary • Copyright © 2009 The Nielsen Company
HCMC v HANOI
Understanding V
consumer
differences
June 2009
Page 1 Confidential & Proprietary

Copyright © 2009 The Nielsen Company
Welcome & Introductions

Aaron Cross
Managing Director
Nielsen Vietnam
Vaughan Ryan
Director, Client Solutions
Nielsen Vietnam
Mai Thi Tuyet Hoa

Associate Director, Client Solutions
Nielsen Vietnam
Confidential & Proprietary

Nielsen’s commitment to deliver you the

Bigger Picture in Vietnam

Sibling rivalry across the globe
New York vs Los Angeles
Beijing vs Shanghai
Madrid vs Barcelona
Sydney vs Melbourne
HCMC vs Hanoi

Executive Summary
• Attitudes of both markets can be defined as individualistic for
the Saigonese while Hanoians have a collective mindset
• Saigonese live for the moment while Hanoians are more

calculated and planned
• The role of advertising is more critical in Hanoi. Price

promotions alone won’t appeal to Saigonese
• Is the Hanoi market really more premium?

– Yes but you will need substantial marketing investment in Hanoi to
achieve success
• How has the tougher economy impacted behavior?

– It differs by market and more importantly by category
– Saigonese in general have been more affected but have not made
drastic changes in their consumption habits Confidential & Proprietary
Agenda
• Setting the Scene

• Research Design
• How do consumers in HCMC and Hanoi make decisions?
– Individualism vs Collectivism
• How can we impact purchasing behaviour?
– Influence factors…and consumers’ willingness to adopt new
products
• Is the Hanoi market really more premium?
• How has the tougher economy impacted behaviour?
• Key Findings and Implications

Setting the scene

HCMC Hanoi
Population: 3.3 mil

Population: 6.3 mil
50/50 Male/Female
48% Male
20-24 age group = 20% of population
52% Female
20-24 age group = 13% of population 43% of people have AirCon &/or
heaters in their home
13% of people have AirCon &/or
heaters in their home 26% use internet every day
19% use internet every day
51% Mobile Ownership 74% Mobile Ownership
20% total Vietnam GDP from HCMC 9% total Vietnam GDP from Hanoi
$368 – Average Monthly Household $344 – Average Monthly Household

income income

Source : Government Statistical Yearbook of Vietnam ; Nielsen Vietnam Surveys and Nielsen Vietnam Omnibus Copyright © 2009 The Nielsen Company
Research Design
• Nielsen Qualitative Study • Nielsen Quantitative Study
– 14 FGD (HCMC=HN= 7) – N = 600
– HCMC and Hanoi (Mid April 09) – HCMC and Hanoi (May 2nd to 15th 09)
– ABC HIB, males & females – ABC HIB, males & females, 20 to 45 yo
– 16 to 40 yo – 40 categories FMCG & non FMCG
• Nielsen Retail Audit • Nielsen Omnibus

– Data up to April 2009 – N=300 (each wave)
– Based on 2 cities (HCMC, Hanoi) – HCMC and Hanoi (Jan to May 2009)
– Covering 43 FMCG categories – Males & Females, 15 to 55 yo
• Nielsen Consumer • Nielsen Personal Finance Monitor

Confidence Study – N=1,000
– Conducted March 2009 – HCMC and Hanoi (Aug – Sept 2008)
– Global online study > 50 – Males & females, 18 to 50 yo
countries – SEC ABC
• Macro Economic data

– Vietnam Govt. General Statistics
Office
How do consumers in
HCMC and Hanoi make
decisions?
Individualism vs Collectivism

Top 5 Consumer Concerns

HCMC Hanoi
1) Health 1) Increasing Food Prices
2) Increasing Bills
$ 2) Job Security
$ 3) Job Security 3) Increasing Bills
4) Work Life Balance 4) Price Increases in Petrol
5) Debt 5) Children’s Welfare
Source: Nielsen Vietnam Omnibus May 2009 Confidential & Proprietary

Individualism V Collectivism
Saigonese Hanoians
It’s my decision that counts. I Other opinions do affect my actions

use other opinions for reference and behaviours
only
“When I came to the store “For example, I want to

to buy an LCD, I had buy a new TV and if some
already decided to buy of my neighbors tell me
Samsung brand before that the TV is not high
going there. I just asked quality, then I would be
others’ opinions for turned off that TV right
reassurance’’ away”

Source: Nielsen Regional Differences Qualitative Study
The Hanoi consumer is a complex beast for

marketers
• Want it all but are willing to wait
• Want the best and will tell you the

price
• Seek others reaffirmation of their

purchases
• Ask others opinions prior to

purchase
• Love promotions and are aware of

“It’s not ok when your prices
friend is using a premium
mobile phone while you • But are conservative in their
use a cheap one. People purchasing behavior displaying more
will look down on you and loyalty
judge you”
Source: Nielsen Regional Differences Qualitative & Quantitative Studies
Saigonese and the push for individualism
• “I don’t care so much what others

think”
• If they need it they will buy it
• Live for today and worry about

tomorrow later
• Do listen to others but in the end will

“Everyone comments make their own decision
that my phone looks ugly
but I don’t really care. It's • Less impacted by marketing
not that important…if • Lower loyalty to brands
people like something, I
don’t necessarily follow
them”
Source: Nielsen Regional Differences Qualitative & Quantitative Studies
Segmentation allows us to look outside

geographical boundaries
Cluster 1 Cluster 2 Cluster 3
Cluster 4 Cluster 5
Base: All respondents Confidential & Proprietary

Source: Nielsen Regional Differences Quantitative Study Q11, Q12, Q14, Q25, Q26, Q33, Q41, Q42
Segmentation allows us to look outside

geographical boundaries
City currently live in
75%
Cluster 1
25%
HCMC Hanoi
Hanoi is one DISTINCT Group

Source: Nielsen Regional Differences Quantitative Study Q2, Q42
Impacted by the crisis
Cluster
2
Cluster
No Change in Consumption
Consumption Change
Cluster
1
Hanoi close to Center = Neutral & Compliant?
Cluster
5
Cluster
4
Not Impacted
HCMC consumers by the crisis
are diverse Base: All respondents
Source: Nielsen RegionalConfidential & Proprietary
Differences
Quantitative Study
The influence from others is significantly

higher in Hanoi
How important are each of these groups in making your purchase decisions?
Recommendations from my
family members
94% 99%
friends
71% 91% *
Recommendations from
colleagues/ partners
52% 83% *
neighbors
42% 94% *
* Significantly higher
Source: Nielsen Regional Differences Quantitative Study Copyright © 2009 The Nielsen Company
Q 23b: Please rate those statements based on importance (1 to 5).Top 2 Boxes
Me vs We
Is it as simple as Saigonese embracing individualism vs Hanoians
being collective in their attitudes?
Saigonese Hanoians
They do care about what others Listen to others advice and act
say as long as they are saying upon this when it comes to
what they want to hear purchase decisions. Others
They will ask for others opinions opinions count.
but in the end buy what’s best They are afraid of making mistakes
for them when they make their own
decisions and want be reassured.
“It’s still good to listen to other “I have trust in people who

opinions on the quality of the have experience using a
products: High ticket items specific product. Sometimes
(Mobile phone, Fashion, LCD we can make mistakes
TV, Washing machine, Air- without asking for others’
conditioner)” opinions…”

To win the Hanoians over is not as simple as winning

one person…but rather an entire city
Saigonese Hanoians
They have their own style, but are

affected by others. They don’t want
to be seen as old or dated and
They don’t feel a need to copy. certainly don’t want to be looked
down upon by others. They don’t
want to feel isolated so they dress
or choose goods that others would
“You must have your own “If you don’t look like others
ideas and it should be within in the society, it makes you
your budget/affordability” feel inferior to them”

HCMC vs Hanoi differences create both

challenges and opportunities for marketers
HCMC HN
I will get others ideas for reference but also filter

down which ones are suitable for me and not 62% 92%*
totally follow them
I am afraid of making mistakes if I decide things

by myself. Getting others ideas for reference will 45% 65%*
help me feel more secure
I will never buy the same clothes that are picked 35% 62%*
by others
I want to stand out in the crowd / among my

peers 24% 40%*

Q 25: How much would you agree on the following statements? Top 2 Boxes
…but from category to category this will differ

especially for Hanoians
• Amongst 15 categories studied, 7 categories recorded “higher
influence from others” in Hanoi
1. Home appliances
2. Vehicles
3. Food
4. Beverage
5. Medicine
6. Financial services
7. Household care products
Across the board Hanoians mindset is clearly

collective compared to Saigonese
Base: All respondents Q 24a: Which categories do you decide

Pageto21purchase based onConfidential
your own&decision
Proprietary/
Copyright © 2009 The Nielsen
based on others advices or you don’t buy but others buy for you or you don’t Company
use?
Source: Nielsen Regional Differences Quantitative Study
But why?
The role of public opinion and social conformity does differ
between the two cities and seems to influence Hanoians more
Saigonese Hanoians
They just live for themselves They don’t just live for themselves
and don’t care “much” about and they do care what others think
what others think. of them. Appearance is key.
They feel a responsibility to obey

“When I go out with my certain standards and disciplines
friends, I don’t need to wear
premium luxurious brands”
“There’s a saying in the

North which is: Tell me what
motobike you are riding, then
I would tell you who you are”

Does this loyalty translate to Made in

Vietnam products?
I care about the product’s origin 85% 95%*
I care about the product’s quality 84% 98%*
I buy quality products to save

money in the long term
79% 94%*
Q 41: How much would you agree on the following statements? Top 2 Boxes
Does this loyalty translate to Made in

Vietnam products?
Volume Share MAT to Apr 09 Volume Share MAT to Apr 09

HCMC = 23% HCMC = 26%
Hanoi = 56% Hanoi = 10%
Hanoi Beer Share = 85%

Source: Retail Audit to April 09
Individualism V Collectivism
In summary
• Hanoians are influenced by many factors…a single

marketing communication strategy will not always work
• Saigonese live for the moment and purchase accordingly

with one core intent…“If I need I’ll buy it”
• The need to obey others and be social conformists

means there is a higher tendency for Hanoians to be
more loyal to “Made in Vietnam” products.

How can we impact

purchasing behavior?
Influence factors…and consumers’

willingness to adopt new products

To impact consumer behavior we first need

to understand the different triggers by each
market
Like to watch ads and are

6% 23%*
affected by them
Base: All respondents * Significantly higher

Source: Nielsen Regional Differences Quantitative Study Q 32: Which statement best The
Copyright © 2009 Nielsenyou?
describe Company
SA
How important are each of these factors in

influencing purchase decisions?
Advertising 41% 91%*
Newspapers/Magazines 42% 83%*

Recommendations from sellers/store
owners 36% 67%*
Internet/other websites to compare
information
22% 95%*
Mfr/Distributor/Seller websites and
forums 22% 100%*
Source: Nielsen Regional Differences Quantitative Study Q 23b: Please rate those statements based on importance (1 to
Copyright © 2009 5).Nielsen
The Top 2Company
Boxes
The role of advertising is more critical in

Hanoi
HCMC HN
I watch advertisement and also refer to others

ideas to feel assured 57% 81%*
I like strange, unique and funny advertisements. It

makes me laugh, feel happy and attracts my 44% 75%*
attention
Advertisements are really helpful when I need to

28% 73%*
buy something
I have a tendency to love meaningful implied

30% 68%*
advertisements
I feel more comfortable with products which

19% 49%*
have many advertisements
Preference for products will depend on the

17% 49%*
popularity of its advertisement
Copyrightstatements?
Q 33: How much would you agree on the following © 2009 The Nielsen
Top 2Company
Boxes
…and Hanoians are likely to respond better to

in store promotions and after sales service
Want to buy products that are on

promotion
52% 69%*
Are willing to pay more to get better

after sales service
34% 57%*

Source: Nielsen Regional Differences Quantitative Study Q 41: How much would you agree on the following statements? Top 2 Boxes
Promotion strategies need to cater to different

consumer preferences
HCMC HN
Saigonese consumers favor multiple Hanoians strongly prefer one type of
promotion types promotion: PRICE
Increase volume/ Shampoo

1 1 Reduce price TV
quantity Beverage
Food
2 Attached gift Shampoo

Bouillon
3 Reduce price TV
Fridge
Base: All respondents Q 19b: Which promotion program do you prefer&the
Confidential most?
Proprietary
Copyright ©program
Q19c: Which categories would you like this promotion 2009 The Nielsen Company
to be applied?
Source: Nielsen Quantitative Study
But does this translate into Adoptiveness?

More Saigonese are early adopters
Saigonese Hanoians
People from the South Hanoians are ‘proud’ of

consider themselves part of a themselves, conservative and
new world with strong are more of a challenge to
penetration of foreign culture/ convince.
investment.
Hanoi is also more heavily
They consider themselves influenced by Chinese system
more open minded and more of feudal values meaning more
willing to experiment with skepticism to change
new things
1 in 5 people from HCMC are early adopters compared to 1 in 10 in Hanoi

Source: Nielsen Regional Differences Qualitative and Quantitative Studies Q 26: Which statement best describe you? SA
Bank Loans: Hanoians are more conservative

whereas Saigonese “live for the moment”
Intention to borrow from banks in the future
HCMC Hanoi
42 39 36
70
49 52 57
22
9 8 9 7
2006 2008 2006 2008
Yes No Not sure
Base: Borrowers from sources other than banks & Non borrowers Confidentialborrow
Q67: Do you intend to borrow money from bank/not & Proprietary
from
Source: Nielsen Personal Finance Monitor Copyright © 2009 The Nielsen Company
bank in the future ?
Influence factors…and consumers’

willingness to adopt change
In summary
• The role of advertising is more critical in Hanoi.

Hanoians also claim to respond better to in store
promotions and after sales service
• Price promotions alone won’t appeal to Saigonese
• Saigonese are early adopters…therefore you need to

invest more to build initial trial in Hanoi

Is the Hanoi market really

more premium?

Is the old adage true?
Saigonese earn 10 Dong Hanoians earn 10 Dong

and spend 11 and spend 1

Hanoians do have a stronger desire to buy

premium products
• Passionate about premium products
• Want to look good and impress others
• Willing to pay a higher price for premium

products
• Tend to be savers and think more long

“I am crazy about a term…hence have a better ability to afford
Louis Vuitton bag premium products when needed
which costs around
US$1,000. I really want
to look for a job that
earns 20million VND a
month so that I can
save enough money
for this LV bag“
I love luxury products 59% 71%*

Source: Nielsen Regional Differences Qualitative & Quantitative Studies Q 29: How much would you agree with the following statements? Top 2 Boxes
Saigonese are less desperate about

premium products
• I love luxury products, yet not too desperate to
have them
• Prefer to buy what they like rather than buy

something that helps them show off
• During a tougher economy they are prepared

to trade down to cheaper brands
• Tend to be impulse shoppers, hence less

“I just want to feel capable of buying premium products
comfortable with
myself…I don’t need
to rush and buy a
premium product just
because others have
them”
Purchasing premium branded products
is only for people who want to attract
people's attention. I am not that kind of 48%* B 29%
person
Source: Nielsen Regional Differences Qualitative & Quantitative Studies Copyrightstatements?
Q 29: How much would you agree with the following © 2009 The Nielsen
Top 2Company
Boxes
Higher willingness of Hanoians to pay higher

prices for products they like
Willing to pay a higher price for

products they like
52% 64%*
Will buy quality products that will

save costs
79% 94%*

Source: Nielsen Regional Differences Quantitative Study Q 41: How much would you agree on the following statements? Top 2 Boxes
Especially when it comes to categories with

high ‘badge value’
For which categories are you willing to buy premium brands? (Ttl spontaneous)
Electronics
Mobile
phone 45% 72%*
Cosmetics
14% 26%*
Base: All respondents Confidential
Q30b: Which are the categories you think of buying premium brands & Proprietary
if your financial
Copyright
situation allows? Top 2Company
© 2009 The Nielsen Boxes
In Hanoi, this is also true for categories that help

consumers look good or impress others
Premium Segment Volume Share of total category (MAT April 09)
Electronics
Milk Powder
28% 45%
Shower
gel 24% 38%

Source: Nielsen Retail Audit Data Up to April 09 Copyright © 2009 The Nielsen Company
Is the Hanoi market really more premium?

In summary
• Currently premium products and brands have more

appeal to Hanoi consumers
• Higher potential for premium segment of those

categories that help them to look good and impress
others
• Manufacturers will still need substantial marketing

investment in Hanoi to maximize the success of premium
product launches

How has the tougher

economy impacted
behavior?

The GEC has impacted global consumer

confidence…and Vietnam has not escaped
1H 2009 Nielsen Consumer Confidence Index

160
140
120
10 4 10 2
99
98
100 96 96
92 91 90
89 89 88 88
85 84
83 83 82 Global average 77
81 81 81 80 80
79 79 78 78 78
80 76 76 75 75 75
74 73
72
70 70 70
65 64
63 63
60 60
60
52
Vietnam Global Ranking 48 48
42
40
1st half 2008 7th 31
2nd half 2008 9th
20 1st half 2009 14th
EE
R
B
E
E
O
O
FR
K
U
IE
FI
SE
ES
SG
E
S
O
ID
IN
PH
PK
VN
TH
SA
ZA
TR
L
JP
TW
A
VE
LV
IL
IT
PL
PT
Y
X
B
G
D
N
A
N
C
A
B
A
A
K
C

Source: Nielsen Global Online Survey – Consumer Confidence, March 2009 Copyright © 2009 The Nielsen Company
However, Vietnamese are still relatively

positive and have faith in a brighter future
Big economic stimulus

I think the crisis is
package from the
more terrible in the
government
U.S. or other
developed countries.
US President Barack
Here in Vietnam it is
Obama’s plan
still safe. Even the
Vietkieus come back
here to find jobs! State Bank Governor Le
Duc Thuy and his
positive statements
towards the economy
It depends on how you control your money,

how wise and clever you are. Besides, I
personally think Vietnam is not strongly
impacted by the crisis.

More Hanoians claim to be influenced by the

tougher economy than Saigonese
How much are you influenced by the economic crisis?
Saving habits 52% 72%*
Shopping habits 52% 93%*
Entertainment habits 38% 71%*

Base: All respondents Q11a: How much are you influenced by the economic crisis on Confidential
the following& Proprietary
items?
Copyright © 2009 The Nielsen
Top 2Company
Boxes
However the net impact of the tougher

economy is higher in HCMC than in Hanoi
22% of Saigonese life is affected, vs 14%
of Hanoians life
I don’t cut down on food

expenses but I just don’t spend
as freely as I used to…I have to
save more
HCMC
Since I’m financially well planned the

crisis does not affect me as much.
However, I think it does strike people
with low incomes
Hanoi
Source: Nielsen Regional Differences Qualitative Study Q11b: How many % your life has been affected by the crisis?
Yet Saigonese have not made drastic changes

in their consumption habits
• Amongst 40 categories surveyed…
Only 1 category recorded a behavior of change above 20% (Clothes)
16 categories with the claimed change of behavior beyond 20%

Have you changed the way you spend, purchase or consume for Laundry and CSDs?
Laundry 18% 33%*
Carbonated Soft Drinks 21% 66%*

Base: All respondents Confidentialcategories?
Q14a: Have you changed the way you spend, purchase, or consume for the following & Proprietary
Source: Nielsen Regional Differences Quantitative Study Changed / Unchanged
In a tougher economy Saigonese adopt

different shopping strategies from Hanoians
Saigonese Hanoians
Saigonese claim to maintain Hanoians claim to be

consumption but are trading consuming less but are buying
down to cheaper brands or the same brand.
smaller pack sizes

Source: Nielsen Regional Differences Qualitative and Quantitative Studies
In a tougher economy Saigonese adopt

different shopping strategies from Hanoians
Instant Coffee: How have you changed your spending and purchasing?
Consume the same amount but

buy cheaper brands or go for 42%* 1%
smaller packs
Ready to sacrifice amount but stick

to their brand
36% 79%*

Copyright
Q14b: In which way have you changed your consumption for the© mentioned
2009 The Nielsen Company
categories?
For some categories, Hanoians will not

sacrifice their consumption levels
• Not willing to change consumption habits of Health &
Beauty products!
Have you CHANGED the way you have spent, purchased or consumed Toothpaste (compared
to before the crisis)?
Changed 13%* 7%
Unchanged 87% 93%*

Volume growth
on YA (MAT April 09) 6% 15%
Confidentialcategories?
Q14a: Have you changed the way you spend, purchase, or consume for the following & Proprietary
Nielsen Retail Audit Data up to April 09 Changed / Unchanged
How has the tougher economy

impacted behavior?
In summary
• Saigonese life in general is more affected than Hanoians life, yet
almost no radical changes in their consumption habits
• Hanoians claim to be consuming less but are buying the same

brands
• Saigonese claim to maintain consumption but are trading down

to cheaper brands or smaller pack sizes
• Marketers should examine changes in consumption habits on a

category basis. Key focus in Hanoi is to drive volume, whilst key
challenge in HCMC is to retain brand loyalty

Key Findings and

Implications

Key findings and Implications

Saigonese Hanoians
Diversity of consumers Homogeneity of consumers

High adoptiveness allows for easy Long term/complex thinkers
trial.
Initially it will take time and a large
Ongoing investment required to investment
maintain brand loyalty especially in
tougher economy Easier to retain once you win their
heart
Live for the moment…less likely to
save to buy premium products How?
How? Promotions should focus on price,

without compromising quality
Make their life easier to suit impulse
behavior After sales service
Distribution, promotions & display Overplay and leverage WOM
Diversify marketing strategy…one Respect social and cultural

size won’t fit all boundaries especially in advertising

Final Thought
One size won’t fit all across Vietnam…
One size won’t fit all within HCMC…
One size tends to fit all in Hanoi

Thank you
Q&A


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Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Page 1 Confidential & Proprietary

Welcome & Introductions

Mai Thi Tuyet Hoa

Confidential & Proprietary

Nielsen’s commitment to deliver you the

Confidential & Proprietary

Sibling rivalry across the globe

New York vs Los Angeles

Confidential & Proprietary

• Saigonese live for the moment while Hanoians are more

• The role of advertising is more critical in Hanoi. Price

• Is the Hanoi market really more premium?

• How has the tougher economy impacted behavior?

• Setting the Scene

Confidential & Proprietary

Setting the scene

Population: 3.3 mil

51% Mobile Ownership 74% Mobile Ownership

$368 – Average Monthly Household $344 – Average Monthly Household

Confidential & Proprietary

• Nielsen Retail Audit • Nielsen Omnibus

• Nielsen Consumer • Nielsen Personal Finance Monitor

• Macro Economic data

Page 9 Confidential & Proprietary

Top 5 Consumer Concerns

1) Health 1) Increasing Food Prices

$ 3) Job Security 3) Increasing Bills

4) Work Life Balance 4) Price Increases in Petrol

5) Debt 5) Children’s Welfare

Source: Nielsen Vietnam Omnibus May 2009 Confidential & Proprietary

It’s my decision that counts. I Other opinions do affect my actions

“When I came to the store “For example, I want to

Page 11 Confidential & Proprietary

The Hanoi consumer is a complex beast for

• Want the best and will tell you the

• Seek others reaffirmation of their

• Ask others opinions prior to

• Love promotions and are aware of

Saigonese and the push for individualism

• “I don’t care so much what others

• If they need it they will buy it

• Live for today and worry about

• Do listen to others but in the end will

Segmentation allows us to look outside

Cluster 1 Cluster 2 Cluster 3

Base: All respondents Confidential & Proprietary

Segmentation allows us to look outside

City currently live in

Hanoi is one DISTINCT Group

Hanoi close to Center = Neutral & Compliant?

The influence from others is significantly

“It’s still good to listen to other “I have trust in people who

Page 18 Confidential & Proprietary

To win the Hanoians over is not as simple as winning

They have their own style, but are

Page 19 Confidential & Proprietary

HCMC vs Hanoi differences create both

I will get others ideas for reference but also filter

I am afraid of making mistakes if I decide things

I want to stand out in the crowd / among my

Base: All respondents Confidential & Proprietary